Options presented for future of Hilo’s Kanoelehua Industrial Area

HILO — State land officials presented a few options for the future of Hilo’s Kanoelehua Industrial Area — from lot consolidation to placing tenants under one master lease — at the Aupuni Center on Friday.

But it was one idea not on the table that some members of the business community there seemed to favor most — selling the public land and giving tenants right of first refusal.

Following the Department of Land and Natural Resources’ presentations, members of the audience peppered officials with questions largely focusing on the land title issue.

The KIA covers 70 leases established to help businesses displaced by the 1960 tsunami. At the time, businesses were given the option to buy the land, and some in the audience, including state Sen. Lorraine Inouye, said that should be considered again.

“This is a unique site,” said Inouye (D-Hilo, Waimea, Waikoloa). “I want the state to look at the options and talk to us (legislators) first.”

Russell Tsuji, state land administrator, said selling any public land would require a supermajority in both the state House and Senate. He added that might be difficult to achieve since the state views the mostly industrial land as part of its public trust.

Nancy Cabral, owner of Day-Lum Properties, suggested the state should sell the KIA lands and use the money to help conserve Waipio Valley.

“If you had a (contiguous) industrial park, I might have a different opinion,” she said.

One of the difficulties the state faces in managing the lands is that they are spread out from around the Afook-Chinen Civic Auditorium to south of Hilo International Airport.

That could present a challenge for placing the tenants under a master lease managed by a nonprofit organization, an idea under discussion but not proposed at this time, Tsuji said.

James McCully of McCully Works said a proposal to sell the KIA lands would be “dead on arrival” at the Legislature. He said tenants should support reforms that could help their businesses.

“Let’s do something we can actually accomplish,” he said.

McCully referred to House Bill 518, introduced last legislative session, as an example. Introduced by four Big Island lawmakers, the bill would create a four-year pilot project that would allow tenants of public lands to relinquish and sell their leases under certain circumstances.

According to DLNR, the KIA leases generate $2.125 million annually. The parcels have a median size of about half-an-acre, lower than the islandwide average.

DLNR staff say there are 17 parcels that were highlighted as a potential for consolidation and redevelopment.

Any changes would need approval from the state Land Board, and DLNR staff say they are not ready to make a proposal at this time.

Email Tom Callis at tcallis@hawaiitribune-herald.com.